Impact of Eartquake on Consumption

285 Words2 Pages
The serious earthquake in Japan had caused the total consumption of the country to be reduced since many of the people losing their job. As the result, the income of the victims will become lower or even zero. The reducing in the income or zero income will lower down their consumption on goods and services because they did not have enough budgets to buy all the goods and services that they want. Based on Naomi Fink, Japan Strategist, she said that the private consumption had decreased about 0.6%. Besides, Boomberg stated that earthquake had also caused Tokyo bay home demand to drop. Before that, many of the people will buy the apartment as the scene is nice. Yet, after occurrence of earthquake, people were concern about their safety and most of them will reject to buy those apartments. This meant that, after the occurrence of earthquake, the victims will also reduce their consumptions on durable goods such as the houses. In addition, the consumption for goods and services in Japan had also decreased due to consumers had become pessimistic about the future economy. For example, after the earthquake, people expected their income will fall in the future. Hence, they would rather start to reduce their spending and increasing their saving. In California, the earthquake did not affect much on consumption. This was because the people in the earthquake areas did not lose much during the earthquake. However, the people may need to increase their consumption for replacing the things that had been damaged. For example, the earthquake had caused the destruction of the cupboards. So the household had to spend on buying a new cupboard which will then caused the consumption to
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